Media and Entertainment Outlook 2017

Growth opportunities and challenges in an on-demand world

​Deloitte’s Media and Entertainment Outlook, developed by the US member firm, provides an overview of industry trends in on-demand media, personalized content, changing business models, and the emergence of new technology.

Growth opportunities and challenges in an on-demand world

Will 2017 be a growth year?

Video-on-demand is dominating the Media and Entertainment industry. This is prompting distributors to come up with different ways to bundle and disseminate content, creating new revenue models, and opening up all kinds of opportunities to push the envelope on content creation.

In Deloitte’s 2017 outlook, Kevin Westcott, vice chairman and US Media and Entertainment lead, covers three important questions:

Where do you see opportunities for growth in 2017?

The way in which we consume news and entertainment has changed dramatically over the past decade, creating both challenges and opportunities for traditional broadcasters. Think about it: Millennials spend more time streaming content than watching it on television, and more than 20 percent of them are viewing shows on their mobile devices. Streaming services are growing rapidly, with around 60 percent of consumers using them monthly. Video-on-demand viewers are expected to reach 209 million by 2021, up from 181 million in 2015. With consumers in the driver’s seat, traditional business models are hitting some speed bumps.

Key takeaways:

“Skinny bundles,” pared-down, less costly subscriptions are becoming a popular offering by a select group of channels, i.e. traditional cable and satellite companies, as well as by over-the-top (OTT) providers like Netflix or Amazon.

We are seeing—especially with Millennials—an interest in shorter forms of content such as serialized web and YouTube segments that are a mere six to ten minutes in length.

Advertisers are experimenting. Ads can blast out a brief message, or longer, creating a sense of drama and telling a story. More sponsorships or product placements within content are evident.

Content creators have a relationship with the end consumer like never before and derived insights about users allow for content and ads to be more personalized.

Companies that can figure out how to push discovery of their content to consumers or help them discover it for themselves will have a leg up in this competitive space.

What should businesses be mindful of as they plan for growth?

Business models and the economics of the industry are changing—something many traditional enterprises are only now beginning to acknowledge. Given the continued fragmentation of audiences, companies need to focus on expanding the reach of their content to the broadest audience possible. That means recognizing that many of their viewers, particularly millennials, are “cord-nevers” and may only be reachable via Internet-streaming channels.

Key takeaways:

With companies like Netflix and Hulu creating original content, will they also need to explore innovative platforms such as virtual reality (VR) or 360 video to keep audiences engaged?

The success of the leading OTT services has led to an influx of new players, and a shakeout is inevitable.

Which markets do you see emerging in the sector?

One of the most exciting emerging developments in media and entertainment is augmented and virtual reality. These technologies offer an entirely new set of opportunities for content creation. An arms race has already begun: In 2015, 234 companies working on virtual reality (VR) had raised a total of $3.8 billion in capital, and VR companies now have a combined market value of $13 billion.

Key takeaways:

As bandwidth improves, companies will be able to deliver immersive content to mobile headsets, paving the way for VR applications that are not tied to a physical location.

Wearables are poised to become important participants in the Internet of Things, interacting seamlessly with other screens and devices and creating ever-more personalized experiences for their owners.

Customizable viewing options will open up new opportunities for companies able to leverage personalized data to hyper-target their content, advertising, and brands.

Look again

What are the key trends, challenges, and opportunities that may impact your business and influence your strategy? Find your industry and gain perspectives and insights from some of Deloitte’s forward thinkers.

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